# 15 Terms Everyone in the the _____ is the price less the variable cost per unit. Industry Should Know

It is important to know the difference between the monetary cost of doing something versus the variable cost of doing it. This is the most important difference between doing something and not doing something, and the one that most gets overlooked. The variable cost is the cost of doing something that is not the same as doing it. The monetary cost of doing something is the cost of doing it that is equal to the variable cost of doing it.

An example of the difference between the two is a car. If the cost per unit of the car is \$100 and the variable cost is \$2, then the car is only \$100 cheaper than buying a car that is \$100 more expensive. If you are spending \$1,000 on a car, you are spending \$1,000 on a car that costs \$2,000 more.

The variable cost is the cost that you will pay for the variable result of doing something. A variable-cost item is one that is cheaper than its variable value. Think of the example of the cost of a car. If you were given a cost of 100, you could choose from either the cost of the car that is 100 or the cost of the car that is 200.

There is a difference between costing the same amount of money but with different results. If you buy a car that costs \$100 but you get a cost of \$100, you would be able to buy a car that is \$100 cheaper if you paid for it with \$100.

A variable-cost item is anything that is less expensive to buy than its original cost. It’s a more flexible cost than the price of the item, because you have the flexibility of choosing how much to pay for it. The cost of the “snowmobile” is the variable cost. It’s cheaper than the price of the “snowmobile” because it’s more flexible than the price of the snowmobile.

The same is true for the “lesson”. You may not necessarily pay for your lesson and its lesson cost in the same way you would if you paid for it with a variable cost, like in the snowmobile example. You may not be able to get it for a lower variable cost, and you may not be able to get it cheaper.

Flexibility of choice is one of the biggest reasons I want to build my own snowmobile. The lesson choice is another. I don’t want to pay for a lesson I’m not going to use.

That’s like saying when we buy a snowmobile, we’re also buying a lesson to learn how to ride it.

The reason I say this is because I have to be careful about where I buy the car, and the car always has to be in its own parking lot.

If we want to get our snowmobiles, we have to purchase it. If we want to buy a lesson, we cant do that. If we buy a lesson that has a variable cost, we cant buy it cheaper. So we have to make a choice, and that is what the price is. 